African Export-Import Bank (Afreximbank) has reported a 76 percent growth in net interest income and an 8 percent growth in assets for the half year ended June 30, 2023.
In its results released Tuesday, the regional lender said net interest income had grown to US$663,6 million mainly due to continuous effective management of interest expenses.
This is after total interest income recorded a strong growth of 107,1 percent to reach US$1,1 billion for the half-year (H1-2023) period compared to US$540,8 million for the same period in 2022.
Net interest margin as a result increased to 4,77 percent, compared to 3,47 percent last year.
Afreximbank Group’s total balance sheet assets also grew by 8 percent from US$27,9 billion as of December 31, 2022 (FY-2022) to approximately US$30,1 billion as of 30 June 2023.
The growth was driven by the increase in loans and advances to customers, which grew by 13 percent to close the period at US$26 billion. The liquidity position remained strong at US$3 billion, representing 11 percent of total assets and achieving a Liquidity Coverage ratio of 310 percent.
The Group’s shareholders’ funds rose by 7,63 percent to US$5,6 billion as of June 30, 2023 compared to FY-2022.
The growth was largely attributable to the US$261 million fresh equity contributions from existing and new shareholders who have supported the ongoing General Capital Increase exercise which aims to raise US$2,6 billion paid-in equity by 2026, the Bank said.
“In addition, the growth in shareholders’ funds was also underpinned by US$125,5 million internally generated net earnings after taking into account the approved dividend and other appropriations which amounted to US$209 million.
Commenting on the results, Denys Denya, Afreximbank’s executive vice president, said the Bank had “delivered a strong set of results”.
He said this was “driven largely by a focused execution of our mandate as a countercyclical lender which generated increased volume of interest-earning assets, particularly loans and advances and benefited from a rising interest rate environment”.
“The Bank continued to make progress on its strategy implementation, carefully balancing the need to be profitable and sustainable, while maintaining sufficient liquidity, capital, and a quality portfolio of assets,” Denya said.
He further highlighted that despite the continued challenges caused by the Ukraine crisis, ongoing geo-political tensions and persistently high inflation, the half-year period saw some headwinds receding, including relatively lower energy and food prices, reduced supply bottlenecks and the re-opening of China, Africa’s biggest trading partner.
Denya pointed out that Global Credit Rating (GCR) and Japanese Credit Rating (JCR) respectively affirmed Afreximbank’s international scale long and short-term issuer ratings of A/A2 and A-, with a “Stable” Outlook, while Moody’s maintained the Bank’s credit rating at Baa1.
In addition, African Banker recently bestowed on Afreximbank, the 2023 African Bank of the Year and the DFI of the Year awards in recognition of the Bank’s contributions to the continent’s Trade and Development.
Significant progress was made during the first half of the year with the Bank’s subsidiary FEDA generating profit after only two years of operation and AfrexInsure generated premium income on assets valued at over US$2 billion.
“We began the second half of 2023 well and are confident that Afreximbank’s strong financial position will provide a solid base for the Group to continue assisting its clients and African countries in expanding trade and investments, meet trade finance obligations, boost production especially of food and export value added products, as well as alleviate supply chain constraints and enable the continent to adapt sustainably to the challenging effects of climate change.”